Balky Buyers Are the Talk of CEO Meeting

HOT SPRINGS, Va. —  Executives of the nation’s largest corporations expressed concern Thursday that the slow recovery will be delayed even more by the hesitancy of fearful consumers.

The dozen or so chief executives attending the fall session of the Business Council here say the hesitancy has created an economic world in which consumers pay off debt before they buy a new car or kitchen appliance. Also, they said, only supermarket staples and health care--both relatively recession proof--have weathered the downturn.

The formal biannual forecast of Business Council economists told a modified tale of woe: sluggish growth, cautious consumption for at least another year and a squeeze on corporate profits for the third year in a row. But it also predicted low inflation and strong export growth.

Bankers foresaw low demand for loans and a continued slide in real estate values--a phenomenon, said Chemical Banking Corp. Chairman Walter V. Shipley, that has shrunk the value of residential housing nationwide by about $200 billion the past year, the first overall decline in the net worth of American consumers since 1962.

But H. Brewster Atwater Jr. of General Mills, a food products manufacturer that would expect to be only slightly affected by a recession, stressed the dominant theme of Thursday’s session: the reluctant consumer.

“Consumers are anxious,” he said. “They see the decline in real estate values, they see their assets declining.”